Not everybody wants to buy a house, condominium, or co-opt, but that doesn’t mean you’re on the outs when it comes to protecting your stuff against loss because you prefer to rent a home or apartment.
This post is explicitly for renting.
What is Renters Insurance?
Simply put, renters insurance provides financial protection against the loss or destruction of your possessions when you rent a house or apartment.
Renters insurance is readily available from leading insurance companies in Grapevine or the Fort Worth and Dallas areas and it’s just as important to have as homeowners insurance is to homebuyers.
Know This: While a landlord may be sympathetic to a burglary you have experienced or a fire caused by your iron, destruction or loss of your possessions is not usually covered by your landlord’s insurance.
Because in most cases, renters insurance covers only the value of your belongings, not the physical building, and the premium is relatively inexpensive.
By purchasing renters insurance, your possessions are covered against:
- losses from fire or smoke
- water damage (but NOT including floods).
Like homeowners insurance, renters insurance also covers your responsibility to other people injured at your home or apartment by you, a family member or your pet and pays legal defense costs if you are taken to court.
Renters insurance covers your additional living expenses if you are unable to live in your your rented home or apartment because of a fire or other covered peril.
Most policies will reimburse you the difference between your additional living expenses and your normal living expenses but still may set limits as to the amount they will pay.
It’s best to work with an insurance agent and respected company in Grapevine or the Fort Worth and Dallas areas when determining the type and amount of renters insurance needed.
There are two types of renters insurance policies you may purchase:-
- Actual Cash Value. It pays to replace your possessions minus a deduction for depreciation up to the limit of your policy.
- Replacement Cost. It pays the actual cost of replacing your possessions (no deduction for depreciation) up to the limit of your policy.
With either policy, you may want to consider purchasing extra coverage, or a floater.
A standard renters policy offers only limited coverage for items such as jewelry, silver, furs, and other valuables. If you own property that exceeds these limits — like expensive home theater or computing equipment — it is recommended that you supplement your policy with a floater.
A floater is a separate policy that provides additional insurance for your valuables and covers them for perils not included in your policy such as accidental loss.
What Type of Insurance is Needed if One Rents a Home?
There are many reasons why one might want to rent a home on either a short- or long-term basis. You might own a second home as a business investment that you plan to lease to a tenant. Or the kids are gone and you might want to rent out a room in your house for a little added income.
Your first step should be to call your insurance company in Grapevine or the Fort Worth and Dallas areas to talk with an agent or representative. Depending on the rental scenario, your standard homeowners policy may not cover losses incurred while your home is rented out, and you may require a more specialized insurance policy.
Short-Term Rentals/Primary Residence
If you are planning to rent out all or part of your primary residence for a short period of time — a week or several weekends — there will likely be two insurance scenarios.
- Some insurance companies may allow a homeowners policyholder (assuming they have notified the company) a short-term rental. Other companies will require an endorsement to the existing homeowners or renters insurance policy in order to provide insurance coverage.
- If you plan to rent out your primary residence for short periods, but on a regular basis, to various ‘guests’, this would constitute a business. Standard homeowners insurance policies do not provide any coverage for business activities conducted in the home. To be properly covered you would need to purchase a business policy—specifically either a hotel or a bed and breakfast policy.
Long-Term Rentals/Second Home
If you are planning to rent out your home for a longer period of time, such as six months or a year, to one person, couple or a family, you will likely need a landlord or rental dwelling policy.
Landlord policies generally cost about 25 percent more than a standard homeowners policy because landlords need more protection than a typical homeowner.
If you are renting out a vacation home or investment property, this would also require a landlord or rental dwelling policy.
Landlord policies provide property insurance coverage for any physical damage to the structure of the home caused by fire, lightning, wind, hail, ice, snow or other covered perils. It also offers coverage for any personal property you may leave on-site for maintenance or tenant use, like appliances, lawnmowers and snow blowers.
The policy also includes liability coverage; if a tenant or one of their guests gets hurt on the property, it would cover legal fees, due to injury claims, and medical expenses.
Most landlord policies provide coverage for loss of rental income in the event you are not able to rent out the property while it is being repaired or rebuilt due to damage from a covered loss. This coverage is generally provided for a specific period of time.
Do YOU Need Insurance When Renting a Vacation Home?
When renting a vacation home, you’ll likely bring various personal possessions along — clothes, luggage, a camera, a computer, sports equipment like golf clubs or bikes, and even jewelry.
For peace of mind, it’s worth determining whether or not your possessions will be covered in the event of loss due to fire, theft or other events.
You May Already Have Coverage
The good news is that your homeowners insurance or renters insurance likely has “off-premises” coverage. This means your personal possessions will still be covered when they are outside your home. You will also be covered for the perils listed in your policy, such as fire, theft, vandalism and hurricanes. However, homeowners policies do not cover breakage or wear and tear to your possessions in transit.
If you are unsure of your existing coverage — and if you are traveling with many costly items — it would be advisable to make a quick call to your insurance company in Grapevine, Fort Worth, or Dallas and talk to an agent regarding your situation.
Some homeowners and renters policies limit off-premises coverage to 10 percent of the amount of coverage you have for your personal possessions.
As an example, if you have $100,000 worth of coverage for your personal possessions, you would have $10,000 for off-premises coverage. If your off-premises policy limits are too low for your needs, you may want to consider purchasing a policy with higher limits.
Helpful Tip: To help keep track of your possessions and file an insurance claim if necessary, create a “vacation inventory” of all of the items with which you travel.
Something Else to Consider: If you frequently travel with highly valuable items such as jewelry, expensive sports equipment or a musical instrument, you may want to add a floater (also known as “an endorsement”) to your homeowners or renters policy
This supplement to your policy will cover the cost of specific higher-value items, whether you’re at home or on vacation. A floater will also usually cover “mysterious disappearance,” which means you’re covered if you simply lose the item or leave it in a cab in New York.
Depending on the type of homeowners or renters policy you purchase, your possessions will be covered on either an “actual cash value” or “replacement cost” basis.